20090422 Dinokeng Presentation Master V7 1

3 FUTURES FOR SOUTH AFRICA

Working Draft (v7.1)Working Draft (v7.1)

April 2009April 2009

PURPOSE OF DINOKENG

“To create a space and language

for open, reflective and reasoned

strategic conversation among

South Africans about possible

futures for the country, and the

opportunities, risks and choices

these futures present.”

WORKING DRAFTWORKING DRAFT

DINOKENG PARTICIPANTS

Convenors (Members of the Scenario Team)

Convenors (Members of the Scenario Team)

Scenario TeamScenario Team

SecretariatSecretariat

SponsorsSponsors

Mamphela RamphelaGraça Machel

Mamphela RamphelaGraça Machel

Vincent MaphaiRick Menell

Vincent MaphaiRick Menell

Njongongkulu NdunganeBob Head

Njongongkulu NdunganeBob Head

Miriam Altman Frans Baleni Ann BernsteinNkosinathi Biko Cheryl CarolusAngela Coetzee Ryan Coetzee Paul HanrattyHaniff Hoosen

Miriam Altman Frans Baleni Ann BernsteinNkosinathi Biko Cheryl CarolusAngela Coetzee Ryan Coetzee Paul HanrattyHaniff Hoosen

Moemedi Kepadisa Reuel Khoza Kallie Kriel Antjie Krog Mary Malete Daniel Mminele Namhla Mniki Aaron Motsoaledi Jay Naidoo

Moemedi Kepadisa Reuel Khoza Kallie Kriel Antjie Krog Mary Malete Daniel Mminele Namhla Mniki Aaron Motsoaledi Jay Naidoo

Yogan Naidoo Maite Nkoana-MashabaneThandi Nontenja Thami ka Plaatjie Sonja Sebotsa Raenette TaljaardMathatha Tsedu Sim Tshabalala Musa Zondi

Yogan Naidoo Maite Nkoana-MashabaneThandi Nontenja Thami ka Plaatjie Sonja Sebotsa Raenette TaljaardMathatha Tsedu Sim Tshabalala Musa Zondi

Sarah BabbMatt BlandPippa Green

Sarah BabbMatt BlandPippa Green

Adam KahaneItumaleng MahabaneAlayne Mannion

Adam KahaneItumaleng MahabaneAlayne Mannion

Debra MarsdenIshmael MkhabelaYvonne Muthien

Debra MarsdenIshmael MkhabelaYvonne Muthien

Old Mutual and NedbankOld Mutual and Nedbank


The team is diverse: It represents a broad spectrum of South African society.

The members have different backgrounds, experiences and perspectives.

They did not agree on everything.

But they were drawn together and guided by what they have in common:

A deep concern that things are not what they should be in South Africa.

A desire to contribute to the construction of a sustainable future.

A commitment to the values of the Constitution.

An acknowledgement of the heritage of our past.

Together, this diversity and shared intent is a core strength of Dinokeng.

WHAT INFORMED THE SCENARIO TEAM’S WORK


DINOKENG PROCESSPHASE IScenario Team

PHASE II Citizens and leaders

Diverging EmergingConvergin

g

Workshops, research and writingPrivate engagement with key stakeholders

Broad public engagement

08/2008 05/2009


Since 1994 we have made great gains but also serious mistakes.

We face severe economic and social challenges, exacerbated by a global economic crisis.

We are at risk of disintegration and decline.

We are at a critical moment of choice: a crossroads.

Our state is too weak to address these challenges by itself.

We can address our critical challenges if and only if citizens and leaders from all sectors (including the state) engage actively and collaboratively.

SOUTH AFRICA IS AT A CROSSROADS


POLITICAL Established Parliamentary democracy Respected Constitution Political pluralism Regular free and fair elections Independent Judiciary Civilian control over army Independent and vigilant Media Culture of Human Rights

ECONOMIC Macro-Economic stability Fiscal & Monetary prudence Progressive economic reforms Sustained economic growth rates Net New Jobs = 3.5 million Reduced unemployment (30% to 23%) Reduced international debt Improved credit ratings

SOCIAL Diverse multicultural society Increased social expenditure Increased access to services Expanded Public Works & Housing (3m)

Poverty alleviation - Social Grants to 12.4 million

Decrease in violent contact crimes

EDUCATION & HEALTH Increased Education & Health Budgets

Increased access to schools and universities

Improved school infrastructure

Increased access to Primary Health Care

Improved child immunization - now 85%

OUR ACHIEVEMENTS


POLITICAL Single party dominance Weak, fragmented opposition Weak leadership in all sectors Lack of state capacity and accountability Weak sense of common nationhood

ECONOMIC Global economic crisis & declining domestic growth High unemployment & skills crisis High Current Account deficit - 7.3% of GDP (Q2

08) Reliance on portfolio investments - R107b in 2007 & Declining FDI R40 billion in 2007 Volatile currency & declining exports

SOCIAL Persistent poverty - 40% of households extremely

poor Increase in racial inequality - Gini Coefficient 0.63

(2006) High youth unemployment - 50% among 18-24 yrs High prevalence of HIV/Aids among Youth - 30% among women aged 15-19 yrs Drug abuse, domestic violence among Youth Weakening social capital & social cohesion Continued racial polarisation - low inter-group trust High levels of violence against women & children

EDUCATION & HEALTH “Number Last” in Maths & Science literacy Nearly half of schools still lack critical infrastructure Acute skills shortages High school drop-out rates (750,000 pa) - only 29% leave with Matric Certificate Decreasing life expectancy - from 63 to 50 (1990-

2007) 4th highest prevalence of HIV/Aids & TB in World Increase in maternal mortality - 166 per 100,000 live births in 2003, from 80 in 1997.

OUR CHALLENGES


OUR MOST CRITICAL CHALLENGES

Education

Unemployment and poverty

Safety and security

Health

If we don’t get things right in these areas, it will be hard for the country to

succeed at anything.


WHAT UNDERLIES THESE CHALLENGES

Pre 1994 legacies:

We have inherited deep structural flaws in our economic, social and political systems.

We have inherited a culture of mediocrity and entitlement from the apartheid and liberation cultures.

Three inter-related trends that have manifested themselves since 1994:

A citizenry that is disengaging and becoming increasingly dependent on the state.

Weak and diminishing state capacity and an unaccountable government.

A leadership that reflects a culture of materialism and self-interest, and a lack of ethics and unaccountability.


WE ARE AT A CROSSROADS

How can we address our critical challenges before they become time bombs that destroy our achievements?

Three possible ways this question can be answered; three possible paths into the future:

- Scenario 1: Walk Apart

- Scenario 2: Walk Behind

- Scenario 3: Walk Together


WHAT ARE SCENARIOS?

Scenarios are not predictions; they describe possible pathways into a future; our future will not necessarily be purely one or the other.

Scenarios must be relevant, challenging, plausible and clear.

The seeds of the future exist in the present - but our future is not pre-ordained; our future depends on the choices we make today.


SCENARIO 1: WALK APART

2009 - 2011 2012 - 2014 2015 - 2017 2018 – 2020

TOMORROW IS LIKE YESTERDAY

Ruling party retains majority.

Global crisis leads to declining investment, growth and tax.

Crisis pact between government, business and labour fails.

Government expands the Public Works programme to create jobs.

Citizens get restless and government increases social grants.

TINKERING AROUND THE EDGES

THE SHADOWS LENGTHEN

DECAY AND A BIG STICK

Cronyism and corruption in government appointments and tenders.

Education and health care deteriorate.

Rift between government and citizens.

Government increases social grants and civil servant pay: social grant recipients now outnumber taxpayers 7 to 1.

Ruling party wins elections with reduced majority.

Crime increases: private security guards outnumber police 3 to 1.

Criminal justice system becomes more inefficient because of cronyism and corruption.

Unions lobby government to increase the minimum wage.

Investment shrinks further; unemployment grows.

Service delivery fails; alternative modes of delivery develop and shadowy forces become more powerful.

The cracks widen; budget deficit balloons; delivery worsens.

Elites buy their way out and poor people lose patience.

Gangs, self-appointed mayors, and taxi associations rule local areas.

“Strongman” wins election, outcome questioned.

Protests spiral and government declares state of emergency.


WALK APART: WHAT THE PAPERS SAY

No accord yet in sight for crisis groupJohannesburg, 2010

Billions more to Public WorksCape Town, 2011

Stellenbosch V-C bows to pressure to goCape Town, 2012

Public Works millions missingPretoria, 2012

Commuters stranded after lines bombed,buses torchedJohannesburg, 2014 Drugs run dry in Mpumulanga clinic

Nelspruit, 2015

Budget 2015: Huge rise in socialwelfareCape Town, 2015

Drug trade finds new avenue in faceof state failureRichards Bay, 2017

Three dead in battle over “tax” Polokwane, 2017

Big victory claim by ruling partyDurban, 2019

35 gunned down in jobs protestDurban, 2020


MESSAGE OF WALK APART

If we fail to address our critical economic and social challenges and to strengthen the state, citizens will disengage further.

Pockets of alternative control and delivery by unaccountable groups outside the state will develop.

Our country will decline and disintegrate rapidly.


SCENARIO 2: WALK BEHIND


Global crisis means declining investment, growth and tax revenues.

Government commits to continued investment in large infrastructure projects.

Government boosts state capacity through greater coordination and training.

Expanded Public Works programmes create more unskilled jobs.

Job losses mount as global crisis bites harder; government spreads social welfare net.

Government, increases tax rates, freezes civil service wages.

National Economic Summit results in Growth and Investment Accord.

Election campaign run on “pro-poor” platform.

Ruling party victory taken as mandate for stronger state intervention in economy.

Government accelerates large-scale infrastructure programme to boost development.

Government feels skills shortage as it tries to develop high-tech SOEs – “winners”.

Improvement of skills through better education and artisan training is prioritised.

Some “winners” become “losers”, with heavy costs to the fiscus.

Prescribed asset laws to force private investment in large projects.

Prescribed asset laws alienate business, investment contracts and unemployment worsens.

State borrows at high interest rates to fund growing deficit.

Election run on “Growth and Redistribution” ticket.

Country gets IMF loan conditional on sharp cut-back in state expenditure.

Widespread discontent and protests: government cracks down.

2009 - 2011 2012 - 2014 2015 - 2017 2018 – 2020PUSH FOR

DEVELOPMENTGLOBAL CLOUDS

DARKENSTATE PICKS “WINNERS”

THE TIDE TURNS


Key ministries to report to DP, to fast-trackSkills developmentPretoria, 2010 Massive boost for PBMR, Eskom

Pretoria, 2011

WALK BEHIND: WHAT THE PAPERS SAY

Business outcry over prescribed assetsJohannesburg, 2015

Social grants, UIF get big boost in budgetCape Town, 2012

Breakthrough accord on economyPretoria, 2014

New bid to recruit skillsCape Town, 2016

Unions threaten clash with governmentover performance plansJohannesburg, 2017

Budget deficit at highest point since 1994Cape Town, 2018

Police, residents in battle over social grantsDutywa, 2020


MESSAGE OF WALK BEHIND

State-led development requires the capacity for planning, coordination and delivery.

Large-scale state projects require heavy borrowings.

State directed investment weakens private initiative and state control creates citizen dependency.

Pervasive state intervention and control is therefore unsustainable.


SCENARIO 3: WALK TOGETHER


Global crisis means declining investment, growth and tax revenues.

Crisis pact wobbles along.

Service delivery deteriorates.

Pockets of citizen groups take action over health, education, crime.

Health-care and parent associations spread through the country.

Government promises action against incompetent managers and civil servants.

Improvements in service delivery.

Ruling party runs election campaign on ticket of competent government.

A weakened ruling party, returned to power, forms alliance with other parties.

Economy begins slow recovery but insufficient to deal with deepening poverty.

A “Citizens’ Charter” is born.

A formal social pact emerges: it includes political parties, labour, business, citizens’ groups.

Business shoulders more responsibility in education, infrastructure, health.

Trade unions back measures to combat youth employment.

Citizens work with government to monitor education, health, and crime.

2009 - 2011 2012 - 2014 2015 - 2017 2018 – 2020THE BLEAK

YEARSCITIZENS

DEMAND MOREA SOCIAL PACT

EMERGESBUILDING

ONE NATION

Government focuses on delivering core public goods.

Business invests more, employment rises.

International investor confidence buoyed by co-operative governance.

Citizens lobby for more accountability from politicians.

Voting system changed so politicians are accountable directly to voters.


Patients protest drugs shortageManguzi, 2011

Health is sick, say protesting patientsDurban, 2012

WALK TOGETHER: WHAT THE PAPERS SAY

Bell tolls on education failuresJohannesburg, 2014

Health minister to meet patients’ groups Pretoria, 2013

Pact needed for deliveryCape Town, 2015

Votes battle goes to ConcourtJohannesburg, 2018

The birth of the Citizens CharterJohannesburg, 2016Special Feature


MESSAGE OF WALK TOGETHER

We can address our critical economic and social challenges only if civil society, business, labour and the state engage and cooperate to increase accountability, build the capacity of the state, deliver core public services, and develop a common identity and nationhood.

We can succeed if and only if citizens and leaders from all sectors rise above their narrow self-interests and contribute purposefully to building our nation.


CAPACITY OF THE STATE

Walk Behind

2020

COMPARISON OF THE SCENARIOS

CHARACTER OF CIVIL SOCIETY

Ineffective

Effective

Engaged

Disengaged

Walk Together

2020

Walk Apart

2020

Corrupt & ineffective stateDistrusting & self-protective citizenry

Interventionist & directive stateDependent & compliant citizenry

Collaborative & enabling stateEngaged & active citizenry

2009


DINOKENG PHASE II

PURPOSE: To create a space and language for open, reflective and reasoned strategic conversation among South Africans about possible futures for the country, and the opportunities, risks and choices these futures present.

DESIRED RESULTS: Individual citizens and leaders at all levels will:

Understand the three scenarios, and the opportunities and risks these pose.

Answer the question: What can I and we do to respond to these scenarios and to build a better future for our country?

Act on their answer, in alliance with others.

MEANS OF ENGAGEMENT:

Briefings, presentations and workshops for leading individuals, groups and organisations.

Supporting mass communications.


NEXT STEPS

The three scenarios suggest three different possible futures for South Africa.

We are standing at a crossroads; each one of us, citizens and leaders, must choose how we walk forward.

Through the choices each one of us make, we will create our nation’s future.

What will you choose to do? When? How? With whom?

What will your next step be?


20090422 Dinokeng Presentation Master V7 1

Investor Relations

Transcript of 20090422 Dinokeng Presentation Master V7 1